Energy Transition Risks: Water and Human Rights Issues

Mining for renewable energy materials brings fresh water and rights concerns

The shift to clean energy requires vast quantities of lithium, cobalt, nickel and copper. However, new research shows that extracting these minerals often worsens water scarcity, increases pollution and harms local communities. Multiple human rights organisations now warn that the materials underpinning the energy transition carry serious social and environmental costs in producer regions.

Amnesty International has documented harms across multiple countries. Communities near extraction sites face health-damaging pollution, forced evictions, dangerous working conditions and loss of livelihoods. Indigenous Peoples’ rights are frequently violated. The pattern appears in the Philippines, the Democratic Republic of Congo and the United States.

Meanwhile, CDP warns that companies involved in the energy transition face high exposure to water security risks. Some assets are already becoming stranded because of the global water crisis. The concern is straightforward: demand for critical minerals is rising fast, yet extraction often happens in places with weak safeguards, scarce water and vulnerable populations.

Water use and contamination risks in mineral extraction

Extracting and processing minerals requires large volumes of water. This creates pressure in ecosystems already under strain. For example, lithium extraction in arid regions can deplete aquifers that local communities depend on for drinking water and agriculture.

Research cited by Reuters highlights that clean energy expansion must be managed carefully. Otherwise, it risks unsustainable pressure on local water supplies. Contamination is another concern. Mining operations can release heavy metals and chemicals into rivers and groundwater, affecting both human health and ecosystems.

The UN Office of the High Commissioner for Human Rights notes that mineral extraction in water-stressed areas creates risks of water loss, contamination and harm to dependent communities. Consequently, water security is emerging as a critical issue for businesses sourcing transition minerals. Companies that fail to assess and address these risks may face operational disruption, reputational damage and community opposition.

Documented human rights abuses in the minerals sector

Human rights concerns extend beyond water. The Business and Human Rights Resource Centre recorded 329 allegations of abuse in 2025, up from 156 in 2024. This represents a 73% increase in a single year. Since 2010, the total has reached 1,226 allegations across 299 mining operations producing transition minerals.

Furthermore, the Centre documented 42 attacks against human rights and environmental defenders in 2025. This figure is more than 50% higher than the previous year. Attacks include intimidation, violence and legal action designed to silence opposition to mining projects.

The UN Office of the High Commissioner for Human Rights has identified evidence of involuntary resettlement, environmental degradation, loss of livelihoods and access to clean water. Forced labour and sexual and gender-based violence also appear in multiple jurisdictions. Human Rights Watch adds that the sector has a track record of child labour, chemical pollution, water scarcity and police violence.

These findings matter because they show that abuses are not isolated incidents. Instead, they reflect systemic weaknesses in how mineral supply chains are governed and monitored. Companies sourcing these materials often lack visibility into conditions at mine sites. Supply chain complexity makes it difficult to trace minerals from extraction to final product.

Why UK businesses need to pay attention

UK companies are directly affected by these developments. Businesses that manufacture batteries, electric vehicles, renewable energy equipment or electronics rely on critical minerals. Therefore, they have exposure to the risks documented in producer regions.

Regulatory pressure is increasing. The UK government has signalled support for stronger supply chain due diligence. Large companies may soon face mandatory human rights and environmental reporting requirements. Businesses that cannot demonstrate clean supply chains could face reputational damage, investor pressure and exclusion from public sector contracts.

Additionally, UK companies tendering for public sector work must meet social value criteria. Procurement policy note 06/21 requires suppliers to demonstrate their approach to carbon reduction. Future policy may extend to broader environmental and social standards, including responsible sourcing of minerals.

Investors are also scrutinising supply chain risks more closely. Environmental, social and governance criteria now influence investment decisions. Companies with poor supply chain practices may find it harder to access capital or face higher borrowing costs. Consequently, businesses need to understand where their minerals come from and what conditions prevail at extraction sites.

The tension between climate goals and extraction impacts

The clean energy transition aims to reduce carbon emissions. However, it cannot be judged solely on that basis. If the materials supply chain reproduces extraction-driven harms, the transition risks creating new problems while solving old ones.

For instance, mining operations that deplete aquifers or contaminate water supplies undermine community resilience. This creates conflict and opposition to renewable energy projects. Similarly, forced evictions and labour abuses generate human rights concerns that contradict the ethical foundations of climate action.

Indigenous Peoples are particularly affected. Many mineral deposits lie in or near Indigenous territories. Extraction without free, prior and informed consent violates Indigenous rights and often leads to long-running disputes. These conflicts can delay or halt projects, creating supply chain uncertainty for businesses relying on those minerals.

The challenge is to scale up mineral production while respecting water rights, Indigenous rights, labour protections and community consent. This requires stronger regulation, better due diligence and more transparent supply chains. Without these measures, the clean energy transition may simply shift environmental and social burdens from one group to another.

What stronger governance looks like in practice

Several policy measures can reduce risks in mineral supply chains. Governments should require robust human rights due diligence across the sector. This means companies must identify, prevent and mitigate adverse impacts throughout their supply chains.

Companies should conduct meaningful community consultation before starting extraction projects. For Indigenous Peoples, this includes obtaining free, prior and informed consent. Producer states need to enforce stronger environmental and social impact assessments. Project information should be publicly accessible so that communities and civil society can monitor compliance.

Transparency is essential. Businesses should disclose where they source minerals and what standards suppliers must meet. Third-party audits can verify conditions at mine sites. However, audits alone are not sufficient. Companies need ongoing monitoring systems to detect emerging risks and respond quickly.

Collaboration across the supply chain is also important. Buyers, miners, governments and civil society organisations must work together to raise standards. Industry initiatives can establish shared expectations, but they need enforcement mechanisms to be effective. Voluntary commitments without accountability have limited impact.

Commercial and compliance considerations for UK SMEs

Small and medium-sized businesses may assume these issues affect only large multinationals. However, supply chain risks cascade through networks. A UK manufacturer sourcing components from a supplier that uses conflict minerals faces indirect exposure to those risks.

Consequently, SMEs should map their supply chains to understand where critical minerals enter their products. This includes batteries, electronics, motors and renewable energy components. Once you know where materials come from, you can assess associated risks and take steps to address them.

Due diligence does not require enormous resources. Start by asking suppliers about their sourcing practices and standards. Request evidence of responsible sourcing policies and third-party certifications. Build relationships with suppliers who demonstrate strong environmental and social performance.

For businesses seeking support with carbon reporting and supply chain compliance, understanding mineral sourcing risks is increasingly relevant. Public sector tenders and large corporate buyers are raising their expectations. Businesses that can demonstrate responsible sourcing gain a competitive advantage.

Training also helps. The SBS Academy offers resources on sustainability topics that can build internal capacity. Understanding supply chain risks, human rights due diligence and water stewardship prepares businesses to meet emerging regulatory and customer expectations.

Five facts UK businesses should know

• Allegations of abuse in transition mineral supply chains rose 73% between 2024 and 2025, according to the Business and Human Rights Resource Centre.
• Mining operations for lithium, cobalt, nickel and copper often occur in water-stressed regions, creating risks of depletion and contamination that affect local communities.
• The UN Office of the High Commissioner for Human Rights has documented involuntary resettlement, loss of livelihoods, forced labour and violence linked to critical mineral extraction.
• UK companies relying on these minerals face growing regulatory, investor and procurement pressure to demonstrate responsible sourcing and supply chain transparency.
• Stronger human rights due diligence, community consultation and environmental impact assessments are now considered essential measures to reduce risks in mineral supply chains.

Actions businesses can take to reduce supply chain risks

Understanding the problem is the first step. Taking action requires a structured approach. Begin by identifying which products in your supply chain contain critical minerals. Batteries, electric vehicle components, solar panels and wind turbines are obvious examples. However, minerals also appear in electronics, motors and industrial equipment.

Next, engage with your suppliers. Ask where they source materials and what standards they follow. Request documentation such as responsible sourcing policies, audit reports or certifications from recognised schemes. Suppliers who cannot provide this information represent higher risk.

Consider joining industry initiatives focused on responsible sourcing. These programmes set common standards and provide frameworks for due diligence. Participation signals commitment to responsible practices and provides access to shared resources and expertise.

Monitor emerging regulations. The UK government and European Union are developing supply chain due diligence requirements. Staying informed helps you prepare for compliance obligations before they become mandatory. Early action reduces the cost and complexity of adaptation.

Finally, integrate supply chain risks into your broader sustainability strategy. Carbon reduction, water stewardship and human rights are interconnected. A comprehensive approach addresses multiple risks simultaneously and demonstrates genuine commitment to responsible business practices. Businesses seeking guidance on ESG compliance and supply chain due diligence can benefit from structured support that connects these issues.

Where to find further information and guidance

Several authoritative sources provide detailed information on critical minerals and supply chain risks. The UN Office of the High Commissioner for Human Rights publishes guidance on business and human rights, including specific resources on extractive industries.

The Amnesty International website offers research reports documenting conditions in mineral supply chains across multiple countries. These reports provide case studies and evidence that can inform risk assessments.

The Business and Human Rights Resource Centre maintains a Transition Minerals Tracker that records allegations of abuse and tracks corporate responses. This database is a useful tool for monitoring risks in specific minerals and regions.

For water-related risks, CDP publishes research and data on corporate water security. Their reports highlight which sectors and regions face the greatest exposure.

UK businesses should also monitor guidance from the Department for Business and Trade on supply chain due diligence and responsible sourcing. As regulatory requirements develop, government guidance will clarify expectations and compliance pathways.